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QUESTIONS TO ASK BEFORE
SELECTING A LENDER
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- Does
the lender (or guarantor) charge Stafford Loan fees?
Stafford Loan origination and guarantee fees are 2.0% for 2008-09
loans.
- What
repayment benefits does the lender offer, and how obtainable are
they?
Lenders offer a variety of benefits as incentive to select them
as your lender. Some benefits are more immediate than others,
many are based on you making a certain number of on-time payments
first and may be lost if you miss payments or consolidate your
loans. Lenders should be able to tell you what percentage of borrowers
qualifies for their benefits. Once you have information on a few
lenders’ benefits, we suggest that you use the following
links to compare them:
o Project
on Student Debt
o The
SmartStudent Guide to Financial Aid
- How
available is your lender?
Some lenders offer online access to your data via their website,
along with form downloads and the ability to IM or email with
questions. Others offer call centers with extended hours and a
knowledgeable phone staff. Whichever you prefer, you should make
sure you can access your data from the point you apply through
repayment.
- Does
your lender outsource?
Some lenders use loan servicing companies to process your loan
application and/or manage your loan repayment. Other lenders perform
these services themselves. If it is important to you that your
lender “own” this process, be sure to ask. If it doesn’t
matter to you, then just be sure to ask what servicing company
you’ll be dealing with.
- Will
your lender sell your loans?
Some lenders sell your loans to other banks or secondary markets,
resulting in the loss of your repayment benefits. Be sure to ask
whether the lender sells their loans and, if so, make sure that
you won’t lose your repayment benefits because of it.
- Check
your sources!
If you decide to use a lender comparison web site,
be sure that you know who provides the data. Many of these sites
are owned by lenders or only display lenders who pay for a spot
on the page.
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